Prefabricated homes in Indian real estate market

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Prefabricated homes in Indian real estate market

Posted by iremn on April 17, 2018
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The world’s tallest building so far, Burj Khalifa in Dubai, employed this technique. So did one of the marvels of modern-day architecture – the Sydney Opera House. Prefabricated construction, beginning in Europe after World War II, has been commonplace in many parts of the world for decades. But it is only now catching on in India.

Building, not brick by brick, but by joining parts that have already been cast – much the way cars are assembled at automobile factories – comprises so far merely 1 per cent or so of India’s $100-billion real estate market. But given the prolonged slump in residential real estate, with inventories at a historic high – around 200,000 unsold flats in the National Capital Region alone – developers are certain its popularity will rise. This is because prefabrication enables faster completion of projects and thereby lowers overall costs. “If it takes a year to complete a housing project using traditional methods, it takes five to six months using precast construction, the scale being the same,” says Naveen Raheja, Chairman and Managing Director, Raheja Developers. For an industry which, following the slump, is highly leveraged, with mounting debts and restricted cash flows, completing projects early saves interest cost and is of crucial importance.
“We have invested around Rs 400 crore on a prefabrication facility and another Rs 350 crore is on the anvil,” says Anil Sharma, Chairman and Managing Director of the Delhi-based Amrapali Group.”We want to have a production capacity of 1.5 crore sq. ft. of building material annually. With that we should be able to construct an 18-floor tower, which normally takes around two years, in less than 10 months.” Apart from Amrapali and Raheja, Delhi-NCR-based Supertech Ltd, the Pune-based B.E. Billimoria and Co, the Bangalore-based B.G. Shirke Group, Sobha Developers and Brigade Group, and many more, have begun to use prefabricated parts.

“This technology can be used for all kinds of construction: high rises, low rises, villas, mass townships, whatever,” says R.K. Arora, Supertech’s Chairman. Supertech is using it for villas and apartment blocks on the Yamuna Expressway between Delhi and Agra, at projects such as Golf Country and Upcountry. “Our premium residential project site Oxford Square in Greater Noida (West) should close earlier than we envisaged because of prefabrication,” Arora adds. “It is particularly useful for mass housing, because it reduces both time and dependence on labour.”

Durability is another advantage. “Prefabricated construction imparts strong structural strength, enabling such structures to withstand earthquakes, which also matters in the seismic-sensitive Indian landscape,” says B.K. Malagi, Executive Director – Projects, at Gurgaon-based Experion Developers. “The concrete panels last longer, too, because of the high quality of elements used and their production in a controlled factory environment.”
Which part of a house can be prefabricated? Practically all of them – ceiling slabs (usually hollowed, which makes them lighter and easier to transport), terrace blocks, wall panels, columns and staircases can be fitted “readymade”. State governments, especially those of Odisha, Chhattisgarh, West Bengal and Himachal Pradesh, and agencies like the Delhi Development Authority, are all encouraging such construction. “We are trying to incorporate prefabricated construction into the Smart City project for Dharamsala,” says Sudhir Sharma, Himachal Pradesh’s Minister for Urban Development. “It would help in greener construction and would be in sync with the ecological balance of this Himalayan town.”

India’s growing interest in such construction has led to global makers of prefabrication machinery and parts – Finland-based Elematic, UK-based Spiroll, Germany-based Halfen, Vollert and Weckenmann and Netherlands- based Van Boxsel Engineering among others – entering the country. Elematic has even announced plans to make India its manufacturing hub for Asian markets, exporting steel structures used for fabrication to Vietnam, Malaysia, Philippines, Thailand and West Asia. Vollert has tied up with Sobha developers to develop 20,000 sq. ft. of prefabricated material daily at a unit on the outskirts of Bangalore. “While the initial cost of using prefab may be higher, there are overall benefits,” says J.C. Sharma, Vice Chairman and MD, Sobha Developers. “Faster execution and timely delivery of the final product brings gains to both developers and customers.”

The government’s objectives of ensuring housing for all by 2022 – which requires constructing 30 million low-cost houses – as well as building 98 smart cities, are both expected to provide a boost to prefab housing. Besides, commercial real estate demand – as distinct from residential – is increasing, led by the IT and e-commerce industries – and this, too, should help. The government’s decision in late 2014 to relax earlier conditions relating to 100 per cent foreign direct investment (FDI) in real estate will allow for faster adoption of modern prefab technologies.

Prefab housing, however, also has its critics. After an early foray, for instance, the Maharashtra Housing and Area Development Authority (MHADA) has decided to stop using prefab construction, because of the heavy damage to such structures during Mumbai’s rains. Manoj Gaur, MD of NCR-based Gaursons India Ltd and President of the NCR Chapter of the Confederation of Real Estate Developers Association of India (CREDAI), prefers other modern technologies. “In our projects we have used ‘aluminium formwork’ technology, which provides long-term benefits,” he says. “It is better than prefab, with higher earthquake resistance and makes construction even faster,” Gaur says. “We have sourced it from South Korea, investing around Rs 100 crore. It has high load bearing capacity and is better in Indian conditions.” Aluminium formwork does away with the need for bricks and plastering, and calls for lower investments than prefab.

Demand for homes in the Indian residential real estate market has witnessed a downward trend since the beginning of 2013. With the constant increase in land prices and construction costs due to improved construction technologies, property prices have been hitting the sky. Since a large portion of the audience in India belongs to the middle-class, these expensive properties fail to fulfil their housing needs. While, on one hand, many people are left looking for their dream homes within their budget, on the other, there exists a large inventory of unsold units.

According to the ‘Housing for all 2022’ plan, the current government proposes to provide housing to everyone in the country by the year 2022. Making 2 crore urban houses and 4 crore rural houses available is a huge undertaking in itself, and will require not only sustained government interest and investment but also substantial private sector investment and involvement.

As of 2014, around 1.2 crore completed houses were lying vacant across urban India. Yet, a large chunk of the indian population resides in “kaccha” houses. This clearly shows that there are is a huge gap in the demand and supply of homes, as well as a lapse in judgement by policy makers and developers. This gap has to be fulfilled at the earliest in order to contribute towards growth of the country. The plug and play approach for infrastructure, as enumerated in the Budget, makes for an ideal blueprint to begin with for both the Centre and the State. This will ensure that the entire focus is towards timely delivery of housing units, which is what is hoped for and expected in the next seven years.

Over time, there have been a lot of changes in the real estate sector in India. We have moved from low-cost housing to niche and luxury housing. The entry of prefabricated homes in India will take convenience in the real estate sector to the next level. Prefabricated housing is one of the most efficient methods that is not only in accordance with the ‘housing’ for all 2022’ plan but will also be more affordable. Apart from the cost-effectiveness, it is also better on the safety front. This is because a large portion of the home construction is completed inside a factory. Work is conducted in a controlled climate and there are fewer costly interruptions. The longer a home takes to build, the more expensive it will be. In case of natural disasters such as earthquakes or a tsunami, prefabricated homes cause lesser damage. The working of a prefabricated house is based on the same principle as that of assembling of a car. Parts of the house, instead of being constructed on site by carpenters, are mass-produced externally and are then transported to the site for much lower costs.

The goal of pre-fabricated housing is to be able to build modern architecture in the most convenient and cost-effective way possible, while providing the best amenities along with beauty and safety. Like Flipkart has redefined shopping, prefabricated housing will redefine the future of the housing sector in India.

At a time when the government is trying to push its ambitious plan of providing ‘Housing for all by 2022’, prefabricated homes – movable structures serving as homes – are gaining traction among developers.

Prefabricated homes, or prefabs as they are popularly known as, have already gained popularity in Europe, Canada and the United States, especially as they cost less and have shorter construction time than other traditional homes. Given their advantages, prefab homes can be a successful construction model in developing economies like India.

At present, prefabricated homes are made using three modern construction techniques – panel built, modular and manufactured. These three terms are often used interchangeably, but there is a significant difference in their utility and construction process tells you about prefabricated homes and explains how their three construction techniques can be helpful for the

Panel built: In this construction technique wooden panels or precast concrete panels are built offsite in factories. If the panels are wooden, they are nailed together, while the concrete panels are assembled on to steel beams and then filled with concrete to impart strength.

Modular construction:This construction technique involves fabrication of buildings in modules. Living rooms, bathrooms, toilets, etc, are built in factories as independent components and later assembled on site, much like ‘Lego’ blocks.

Manufactured homes:The process of constructing manufactured homes requires an entire structure offsite. Once the home is complete, the final product is transported to the buyer. The offsite installation also includes plumbing, floor heaters or air-conditioners and electrical connections. Following its construction, the home undergoes a ‘settling-in’ period, during which the house is transported to the buyer. However, manufactured homes are not the most popular because of the likelihood of wear and tear while being transported

Why prefab housing?

Though prefab housing may seem to be a modern innovation, these structures were first made in India during Akbar’s rule in the 16th century. Here is why these structures can be viable for the Indian real estate market:
Shorter construction time: Prefabrication allows for a substantial improvement in construction time. A prefabricated house is likely to take half the time taken by usual construction. Since most of the parts are manufactured in factories, factors like weather do not delay the process. Besides, a building permit is not necessary until the house arrives on site. Thus, construction of your house will not be hindered by any legal discrepancies.

Energy efficient: There is a lot of wastage during onsite construction, thanks to weather conditions and human errors. But in a factory all the wasted materials can be recycled – since most of the process is computerized in prefabrication techniques, there is a minimal human error. Construction in a controlled environment ensures better insulation, accurate measurements and connections, which reduce the overall energy consumption of the house. An enclosed workplace also allows better quality monitoring.

Monetarily inexpensive: Computerised construction processes allow customization at affordable costs. Since these homes are more energy-efficient, the owner can save on electricity bills. Another problem faced in onsite construction is material theft. In this case, however, all materials required are made exclusively for your house, so chances of them disappearing is less.

With so many building options today, it’s hard to choose which one is the right one for you and your family. Pre-fabricated homes and various versions of these homes seem to be making considerable headway in the housing market.

A prefabricated building is a home that is built off-site – whether it be in modules that will be discussed below, panels or mobile homes. While performing research on your future home, you have more than likely heard of modular homes –but what exactly are they?

Modular homes are constructed off-site from the lot where your future home will stand. They are often advertised as modern, energy efficient and cost-saving as they are built in as little as a few months in a manufacturing setting. Your modular home would be manufactured in pieces – complete with electrical finishing’s, wall color choices and windows – and delivered and assembled on site as specified by you.

Advantages of Prefabricated Homes

Modernizing the Look with Energy Efficiency

Though modular homes are historically associated with lower quality, this is no longer the case today. Various companies across North America are making modular homes attractive by using geometric and modern exterior finishing’s that boast open spaces and maximize natural light in your home.

In order to stand out from the competitive modular market, builders are looking to maximize energy efficiency through numerous methods such as recycling materials, using LED lighting and installing solar panels. This ensures that you save money on your energy bills to the point where you may be producing clean energy that will be put back into the energy grid.

Zero Waste and Zero Inspection Hassle

After being created in the factory setting, these modular pieces are then transported to site and assembled using heavy machinery. Similar to a BONE Structure home, modular homes do not produce waste as all the required materials for construction arrive on site already installed in the modular pieces. It would be like putting together a Lego home – except all the pieces are rooms, designed to your desire and needs. In addition to their ease of construction and energy advantages, modular homes are almost always manufactured to code, ridding you of the worry that comes with home inspections by your municipality.

Reliable Schedule

An additional advantage to modular homes is the minimal opportunity for negative schedule interference to occur. This is in part due to the construction of the pieces being in a controlled indoor environment that can’t blame weather for delays. Without weather interruptions, the average home would be constructed in no longer than four months. During this construction process, workers are put in a low risk environment that elevates their feelings of comfort. With healthier workers, you can be certain that your home will receive the care and attention to details that it requires in order to be built safely and soundly.

Faster Building

Prefabricated homes are built in a factory, which allows for simultaneous site and foundation work. Getting work done concurrently can reduce project time by up to half of what you would be spending on traditional construction.

Also, most of the construction process is done inside a factory, which can hugely lessen delays due to bad weather, theft, or vandalism. Tighter construction can allow faster occupancy, which allows for a faster return on investment.

Less Project Cost

The factory setting of the prefabrication process is a more controlled environment than an actual site. These increased controls allow for better material planning, which reduces material surplus. You then have less storage cost and less material loss from damage or pilferage.

Because of the time you save from building without weather constraints and getting on-site and off-site work done simultaneously, you also save on labour hours and manpower costs.

You can also save on costs involved when your project is in an area that’s hard to access, like far-flung towns or places experiencing a surge in construction. Easy building access to remote areas was something the Queensland government enjoyed when they provided prefabricated houses for disaster-damaged remote towns in 2011.

Better Quality Control

Ensuring high-quality prefabricated homes is generally easier since modules are constructed in climate-controlled facilities with precise equipment and methods. They’re built using plans with exact specifications on materials and building procedures, so the finished structure would be more consistent with the design you have in mind.

Compared to traditional buildings, prefabricated structures go through more initial wear and tear from the transportation of modules and the craning of these portions onto the building’s foundations. Putting this into consideration, each individual module has to be built stronger, in order for the final structure to satisfy building codes and standards. With stronger modules, prefabricated homes can have the same or even higher level of quality as a site-built house.

Sustainable Methods

Prefabrication can significantly reduce the demand for raw materials and energy. The reduction of material surplus and being able to recycle modules translates to less waste. Since most of the construction is done off-site, you also reduce the impact on the site environment. With good planning, you can also decrease the amount of vehicles and equipment needed at the construction site.

Constructing prefabricated homes can also be safer for builders. With most of the building done indoors, there is less risk of accidents, environmental hazards, and other such liabilities. Materials are kept safe as well, so there is less likelihood of theft and vandalism.

Flexible Construction

Prefabricated homes can be disassembled and relocated or remodeled for reuse. You can create a new building with less time and effort than if you were to construct anew.


Prefabricated housing, sometimes referred to as modular housing, is a type of home construction in which sections of the home are manufactured in a factory and transported to the building site for assembly. The main advantage of the prefab manufacturing process is that homes can typically be constructed more quickly than a traditional home. Buyers also have a wide variety of designs and styles to choose from. However, prefab homes also offer certain potential disadvantages.

Disadvantages of Prefabricated Homes

Limited Design Options

On the flip side – modular homes are known to come with their own sets of disadvantages. Depending on the company you choose to build your modular home with – you can be stuck with a limited amount of material options and home layout possibilities. This implies that your home may have less flexibility in the design than you anticipated.

Reduced Resell Value

Modular homes also have a stigma surrounding them: that they are of lower quality, which makes them extremely difficult to resell. Modular buildings have historically been associated with lower quality homes that boast dated designs, such as every home buyer’s nightmare: popcorn ceilings. Today, the modern modular structure is trying to revamp how the market perceives these homes, however, it is worth noting that it may be a few years before modular homes are viewed as equals, if not superior, to stick frame homes in North America.

Difficult to Finance

Modular homes need to be built with a corresponding finance plan that will differ from the mortgage plan associated with traditional stick frame homes. Banks are generally unfamiliar with the modular home construction process and the fact that most payments are required to be made upfront. Banks have been known to deny some people the mortgage required to support this process and clients have had to look at various options before being able to continue with the construction of their modular home.

Finding Land

In addition to purchasing the prefab home itself, you will have to find a suitable plot of land. It may take time and effort to find land in an area or neighborhood that is acceptable to you. According to the Modular Today website, a plot of land could cost as much as $100,000 or more, depending on where it is located and the status of the real estate market.

Upfront Costs

Building a prefab home requires you to pay the manufacturer while the construction process is under way, with payment in full due before the home is completed. If you don’t have the cash on hand, you will have to take out a loan to cover the costs. Your prefab home dealer will pay off the loan when your home is finished and issue you a mortgage, much like a bank does for a purchaser of a traditional home.

Transportation and Assembly Issues

Because prefab modules must be transported from the factory to the building site, there is always the possibility of damage while in transit. Depending on how far the modules must travel, your transportation costs could also be relatively high. Precision assembly of the home is also necessary, as improper assembly can result in issues such as joint failure and leaks. Some issues may not become apparent until well after assembly is completed and you’ve moved into the home.

Image Problems

Although modern prefab homes feature sturdy construction and quality building materials and cost about as much to build as traditional homes, many people still perceive them as inferior, low-income housing. This could make it more difficult to sell the home when the time comes. The industry also has its share of disreputable manufacturers, which adds to the negative image. Before committing to a builder, check with your state manufactured housing association for possible complaints against it.

In Conclusion

When deciding on a method of construction for your custom home, it is important to do an in-depth research on all the options available. With the right designer and builder, you will not be compromising on cost, design and the feeling of satisfaction when you will eventually turn the key of your finished home eventually. Knowing this, you will be more than equipped to choose the custom home construction method that best suits your needs!

Prefabrication is a relatively new way to build structures, and like a lot of new things, you’ll hear mixed opinions about it. What people don’t like about it varies. It ranges from the limited customisation you can do on a module, the space you need to transport portions of your facility, or the potential difficulty in getting a loan for a modular home.

While prefabrication has its flaws, there’s a reason it’s growing in popularity; prefabricated homes have a handful of advantages. We’re going to talk about five of them.

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